TMI Blog1963 (9) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... numerous persons began to assert their rights in these properties, claiming to be his heirs. Having regard to the scramble for succession, the Military Governor of Hyderabad, in exercise of the powers conferred upon him by H.E.H. the Nizam, promulgated a regulation called the Salar Jung Estate (Administration) Regulation No. XXXVI of 1358 F. (hereinafter will be referred to as the regulation for the sake of brevity). This regulation received the assent of H.E.H. the Nizam on the 25th Jamadi-us-Sani, 1368, Hijri--25th Khurdad, 1358 F. Pursuant to this regulation, the Government appointed a committee called the Salar Jung Estate Committee (hereinafter will be called the committee) to administer the estate of the late Nawab. We will presently refer to the relevant terms of the regulation as they play a leading role in the context of the present enquiry. Suffice it to say here that this committee functioned till 25th May, 1959, when it was dissolved on a notification issued by the present Government. Shortly after the establishment of the committee, the Nizam issued a firman appointing two judges of the erstwhile Hyderabad High Court to hold an enquiry regarding the warasat and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dulla, father of the appellants, who was the maternal uncle of the late Nawab. Syed Abdulla died on 24th February, 1954. On his death, the present appellants were brought on record as his legal representatives. Subsequently, Syed Hasan Pasha, second appellant in W.A. No. 39 and W.A. No. 40 of 1961 raised a suit claiming a share in the estate of the late Nawab. To this action were impleaded 17 persons as defendants including the Government of Hyderabad State and the Union Government. Gradually, the number of defendants swelled to 110. There were other suits also filed by persons claiming to be the heirs of the late Nawab and all of them ultimately ended in a compromise. The compromise filed in C.S. No. 13 of 1958 (on the file of the original side of the High Court of Judicature of Andhra Pradesh at Hyderabad) was a comprehensive one in that it included the terms of the previous compromise also. The details of the terms of compromise need not detain us here, as nothing turns upon them in these appeals. Meanwhile, Parliament of India enacted the Estate Duty Act (XXXIV of 1953). In exercise of the powers conferred by sections 53 and 55 of this Act, the Estate Duty Officer issued a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir death. We will now turn to section 3 of the Act, which says: (1) For the purposes of this Act,-- (a) a person shall be deemed competent to dispose of property if he has such an estate or interest therein or such general power as would, if he were sui juris, enable him to dispose of the property.......... The other clauses of the sub-section do not have much of a bearing and, therefore, they need not be extracted here. Section 2, clause (16), recites: 'Property passing on the death' includes property passing either immediately on the death or after any interval, either certainly or contingently, and either originally or by way of substitutive limitation and 'on the death' includes 'at a period ascertainable only by reference to the death'. This clause postulates that property is said to pass on the death even if it should pass after a long interval and even contingently. By reason of this clause, it is not only property that passes immediately on the death of a person that is exigble to estate duty but also property which passes after a lapse of some years and even contingently. This clause has an intimate bearing on the present e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Section 4.--No person, including heirs, if any, of the late Salar Jung, shall be entitled to the possession of the estate of the deceased so long as the estate is under the administration of the Salar Jung Estate Committee. Section 5 provides for the duration of the administration of the estate by the committee, while section 6 casts an obligation on the committee to render to Government an account of its administration. Section 8 empowers the Salar Jung Estate Committee to make rules with the sanction of the Government to carry out the purposes of the regulation and in particular for the more convenient transaction of the business of the committee and for the manner in which orders and other instruments made and executed in the name of the committee shall be authenticated. What then is the effect of these provisions? Do they extinguish the right and title of the heirs of the late Nawab? Sri Chinnappa Reddy, learned counsel for the appellants, invites us to hold that this is the effect of sections 3-A and 4. It is urged that as the whole of the estate was vested in the committee and that no person, including any heirs, could claim possession of the estate so long as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the appellants that while incontestably the legal estate alone vested in the committee and the beneficial interest did not vest in anyone, full powers were conferred upon the committee to deal with the properties in any way it liked, and since there was none who could question either its acts or claim any interest in the properties so long as they were under the management and administration of the committee, the heirs of Salar Jung could not be deemed to possess any beneficial interest in that estate. We are unable to accede to this proposition. A perusal of section 3 shows that the powers conferred and duties cast upon this committee were similar to those pertaining to court of wards under the Court of Wards Act, 1350 F. It is true, as contended by the learned counsel for the appellants, that, unlike in the case of the court of words, the estate here vested in the committee. That, in our opinion, does not make any material difference in construing the nature of the estate that vested in the committee and the character of the rights of the persons who might finally be found entitled to the estate. We cannot overlook in this context the fact that the committee had to rend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Begum v. State of Hyderabad(I.L.R. [1953] Hyd. 1), consequent upon the declaration that the firman was null and void as being opposed to article 1 of the Constitution, the parties could invoke the jurisdiction of the civil courts to have their claims settled. After the Full Bench decision, the parties could have recourse to civil courts and, in fact, they did resort to civil courts, and thereafter, the committee could hold the estate only for the benefit of those that would succeed in the litigation, be they the near relations of the late Nawab or the State Government if none of them are declared as the lawful heirs. In this state of affairs, it is difficult to predicate that Syed Abdulla or persons similarly situated had no interest in the estate of the late Nawab, which could be termed as an estate within the meaning of sections 5 and 6 of the Estate Duty Act, 1953, and which could be said to have passed on to their heirs on their death. We will now turn to the decisions cited by the learned counsel for the appellants which, according to him, establish the proposition that when once the estate had vested in a person or a committee like the Salar Jung Estate Committee, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Inland Revenue, because, in my view, Prince Munster could never properly ask to receive back the property except upon the footing that this sum is paid. The learned counsel for the appellants relies upon certain passages in the judgment of Russell J., which according to him supports the view which he pressed upon us. The learned judge remarked at page 277 of the report: Subject to the widest possible discretion vested in the Board of Trade or the court, and subject to the provisions of subsection (2), the custodian is bound to hold the property vested in him under the Act until the termination of the war; and after the termination of the war he is bound to deal with the property in such manner as His Majesty may by Order-in-Council direct........ The phraseology used in the Preamble and in section 5 establishes in my judgment that, pending its disposition by Order-in-Council after the determination of the war, the property is removed from the control and from the beneficial ownership of the enemy. At the termination of the war fresh considerations will arise; and whether the enemy will recover, and to what extent he will recover, the beneficial ownership will depend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneficial ownership during the war and the custodian after the termination of the war was bound to deal with it in such manner as His Majesty (keeping no doubt in view the arrangements made at the conclusion of peace) may by Order-in-Council direct. Down below, he makes it abundantly clear that the beneficial ownership remained in statutory suspense or abeyance. It was in that context that it was held that the custodian had not received those profits and gains and did not hold them in any sense as an agent or receiver or trustee for Prince Munster. What follows from this decision is that, during the time the property was with the public trustee, the rights of the enemy were suspended. He could not claim to be restored to possession of the property and he could not deal with it during that period. The principle of this decision, if applied to the present case, would, far from advancing the position of the appellants, furnish an effective answer to their contention. It establishes that the beneficial ownership inhered in the persons that would ultimately be found to be the heirs and after the cessation of the period during which they could not claim to be restored to it, the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down by Russell J., and also by Lord Morton of Henryton and the earlier observations made by Lord Asquith himself. As already pointed out, this decision was relied upon by the learned counsel for the appellants only as approving and adopting the principle enunciated by Russell J. in In re Munster [1920] 1 Ch. 268. We do not think that this pronouncement of the House of Lords is of any assistance to the appellants. The learned counsel then cited to us Clifton v. Strauss [1927] 1 Ch. 313, relied on by our learned brother in support of his conclusion that the vesting of the estate in the committee did not in any way defeat or destroy the rights of the ultimate beneficiaries. We agree with the learned counsel that Eve J., who dealt with the cited case, was not concerned with the effect of the vesting of the properties of the alien in the public trustee but was mainly concerned with the question as to the location of the shares owned by the enemy at the time of the outbreak of the war. In that case, the testator, a German subject, was, at the outbreak of the war, entitled to stocks, shares and securities in English, South African and American companies which had been purchased ..... X X X X Extracts X X X X X X X X Extracts X X X X
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